DTN Midday Livestock Comments 03/19 11:51
Early-Week Losses Flood Through Livestock Trade
Livestock futures have posted triple-digit losses through the last half of
the morning with traders focusing on aggressive outside market losses. This may
add even more weakness to the complex as traders continue look for stability
through the end of the day.
By Rick Kment
DTN Analyst
GENERAL COMMENTS:
Sharp losses are seen in all livestock trade with triple-digit pressure
developing in most nearby contracts. Hog futures have posted the most
aggressive pressure with nearby contracts breaking through support levels that
have developed in the last couple of weeks. Corn prices are lower in light
trade. May corn futures are 6 cents lower Monday. Stock markets are lower in
light trade. The Dow Jones is 327 points lower while Nasdaq is down 162 points.
LIVE CATTLE:
Strong pressure is developing in live cattle trade. June through October
contracts are holding losses of $1.20 to $1.37 per cwt with the underlying
weakness in all cattle and most outside markets sparking follow-through
liquidation. The inability to bring some stability to the cattle trade is
eroding not only fundamental support, but likely expected to limit the
potential of technical support through the complex. Cash cattle activity
remains quiet early Monday with packers focusing on collecting show lists
through the morning as well as inventory taking for the next two weeks. With
end of the month processing schedules in sight, packers are focusing on the
ability to draw on Easter holiday needs as well as potential plant slowdowns
through the last week of the month. Boxed Beef cut-outs at midday are mixed,
$1.74 higher (select) and down $0.22 per cwt (choice) with light movement of 33
total loads reported (18 loads of choice cuts, 10 loads of select cuts, no
loads of trimmings, 5 loads of ground beef).
FEEDER CATTLE:
Feeder cattle futures have eroded through the morning with triple digit
losses seen in March through October trade. This lack of support in the cattle
complex is not only adding to the longer term weakness in the complex, but also
has created concerns that sharp outside market pressure will continue to draw
selling pressure to the market over the near future. Even though aggressive
losses are seen at midday, the entire complex is contained into a narrow
trading range with all nearby futures holding losses from $1.20 to $1.22 per
cwt lower.
LEAN HOGS:
Losses through lean hog trade have expanded through the morning with current
losses seen from $1.20 to $2.25 per cwt. The most aggressive pressure is seen
in spring and summer contracts as traders remain focused on the aggressive
outside market pressure and concerns that previous buyer support will quickly
erode over the near future. June futures have quickly broken through recent
support levels, leaving more room for additional price pressure. This is likely
to limit buyer activity in all contracts through most of the day. Cash prices
are lower on the National Direct morning cash hog report. The weighted average
price is down $0.46 at $59.50 per cwt with the range from $52.00 to $59.50 on
3,425 head reported sold. Cash prices are higher on the Iowa/Minnesota Direct
morning cash hog report. The weighted average price is up $0.67 at $57.78 per
cwt with the range from $52.00 to $59.50 on 581 head reported sold. The
National Pork Plant Report posted 131 loads selling with carcass values falling
$0.54 per cwt. Lean hog index for 3/15 is at $65.52, down 0.41 with a projected
two-day index of $64.97, down 0.55.
Rick Kment can be reached at rick.kment@dtn.com
(BE)
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